Property Tax Assessments: How They Work and How to Appeal Yours

Written by Samantha SheltonNMLS 1647301Updated October 2026

A property tax assessment is a local assessor’s estimate of your property’s value, used to divide a community’s total tax levy among the owners who fund it. It is not a bill by itself. Your tax is that value multiplied by the local rate, and rates are quoted in mills: one mill raises $1 per $1,000 of taxable value, so a 40-mill combined rate on $100,000 of taxable value produces a $4,000 annual bill.¹

Homeowner at a kitchen table reviewing a property tax assessment notice and comparable sales on a laptop

Because the rate is each district’s levy divided by the total value of everything it taxes, a higher assessment does not automatically mean a higher bill. Illinois puts the full cycle, assessment, review, equalization, levy, extension, collection, at nearly two years for most properties.

Learn how assessors reach your number, why an increase may not move your payment, and the six steps for appealing one that’s wrong. Newer to owning? Start with our Homeownership guide or our Taxes & Money library.

Key takeaways:

Your bill is value times rate, not value alone: One mill raises $1 per $1,000 of taxable value, and the rate is a district’s levy divided by its total assessed base, so when every property in a district gains 10% and the budget stays flat, the rate falls and your bill barely moves.
Appeals are won on records and comparables: Pull your property record card first, then gather 3 to 5 sales that closed near the assessment date. Assessors build value from three approaches, sales comparison, cost, and income, and you win by attacking those inputs.
The clock starts at the notice, not the bill: Michigan assessors must mail the assessment notice at least 14 days before the March Board of Review, and a residential appeal to the Michigan Tax Tribunal is due July 31. By the time a tax bill arrives, it is generally too late to contest that year’s value.

What is a property tax assessment?

A property tax assessment is the value a local assessing official assigns to your property so a community’s tax burden can be divided proportionally among owners. It answers one question: what share of the total is yours? The Cook County Assessor’s Office puts it plainly. Your assessed value determines your share of the local levies relative to the total assessed value of your area.

Illinois trains assessors to work in four moves: discover every parcel using tax maps, permits, and sales records; list its characteristics on a property record card; value it; then assess it at the statutory level. Three of the four are factual. Which is why factual errors are the easiest appeals to win.

Three numbers get confused constantly, and knowing which one your notice quotes is the difference between a strong appeal and a wasted afternoon.

Feature	Market value	Assessed value	Taxable value
Who sets it	Buyers and sellers	The local assessor	The assessor, by statutory formula
What it represents	The most probable sale price in an open market	A fixed fraction of market value, 50% in Michigan, 10% for Cook County homes	The figure the millage rate is applied to
What it is used for	Listings, offers, mortgage appraisals	Dividing the levy, your share of the burden	Computing the dollar amount of the bill
How fast it can move	As fast as the market	As fast as the reassessment cycle allows	Capped in some states; in Michigan, the lesser of 5% or inflation

Assessed value is not an appraisal and usually is not what your home would sell for. The number a lender relies on comes from a licensed appraiser, see the home appraisal process, and why home appraisals matter for where the two valuations diverge.

How does the property tax assessment process work?

The cycle runs about two years and splits into two independent halves: an assessment cycle that decides how the burden is divided, and a budget-and-levy cycle that decides how big it is. Dates differ by state, but the sequence is close to universal.

Assessment: The assessor values every parcel as of a fixed date, December 31 of the prior year in Michigan, January 1 in Illinois, using one or more of three approaches: sales comparison, cost (replacement cost minus depreciation, plus land), and income.
Review: A board of review hears complaints and corrects values. In Illinois the assessment cycle alone runs nine to twelve months, depending on county size and complaint volume.
Equalization: The state or county applies a multiplier so different jurisdictions assess at comparable percentages of market value, a fairness step between communities, not a tax increase.
Levy: Each taxing district, schools, county, township, library, fire, passes a budget after a public hearing and certifies the dollars it needs. This step determines what taxpayers pay in total.
Extension: The county divides each district’s levy by the total assessed base to get the rate, then multiplies each parcel by the sum of every rate that applies to it.
Collection: The treasurer bills, collects, and distributes the money to the taxing districts.

Notification lands between assessment and review. Michigan’s assessor must mail a first-class notice showing last year’s assessed and taxable values, this year’s tentative figures, the net change, the classification, the inflation rate, and the time and place of the board of review at least 14 days before that board meets. That notice, not the tax bill, is your starting gun.

Does a higher assessed value always mean higher taxes?

Not necessarily, and this is the most misunderstood point in property taxation. The Cook County Assessor’s Office answers it directly: assessed value is only one factor, and the total levy set by local taxing bodies like schools drives the rate. Property taxes fund a levy, not a percentage, so if the levy doesn’t grow, a bigger base just gets divided more thinly.

The arithmetic is worth doing once. Say the districts covering your township need $10 million and the township’s total taxable value is $500 million. The rate is $10,000,000 ÷ $500,000,000 = 0.02, or 20 mills, and a home with $100,000 of taxable value owes $2,000. Now let every property appreciate 10%. The base becomes $550 million, the same $10 million spreads across it at roughly 18.2 mills, and that home, now at $110,000, still owes about $2,000.

Two things follow. A value increase only raises your bill if your value rose faster than your neighbors’. Which is why uniformity beats a claim that the number feels high. The International Association of Assessing Officers treats an appraisal level between 0.90 and 1.10 as acceptable for any class of property, so drift outside that band is an arguable defect. Your bill can also rise in a flat market when a district passes a new millage or a voter-approved bond, decided at budget hearings rather than on your notice. Our roundups of the impact of new tax laws on homeownership track what took effect versus what was only proposed.

If you have a mortgage, your servicer pays these bills from escrow and re-runs the math annually. Federal rules cap the cushion at two months of estimated disbursements, so a real increase surfaces as an escrow shortage and a higher payment months later, see mortgage escrow accounts.

Why your property tax assessment may be wrong

Assessors value thousands of parcels at once using mass appraisal, so individual errors are structural, not scandalous. Illinois publishes four recognized grounds for appeal, and every one is something you can document.

The assessor’s market value exceeds actual market value: Best supported by a recent arm’s-length purchase or a professional appraisal.
Your assessment level is out of line with the district: Your ratio of assessed value to market value sits above the prevailing township or county median in an assessment-sales ratio study.
The underlying property data is wrong: An incorrect building measurement, lot size, bedroom or bath count, or a finished basement that isn’t finished. The most common and most winnable category.
Similar neighboring properties are assessed lower: A uniformity argument, made with the record cards of comparable homes on your street.

Timing causes problems too. Values are set as of a fixed date, so a market that turned after it won’t show up until the next cycle, and one that ran up before it will. Check FHFA House Price Index data for your metro, which measures repeat sales of the same properties, before assuming your notice is out of step.

Renovations are the other surprise: permitted work adding square footage generally gets picked up, while ordinary upkeep usually should not. Our deep dive on the impact of home improvements on property taxes covers which projects move the number.

How to appeal your property tax assessment in 6 steps

You are appealing the assessed value, not the tax bill. Tax rates are not an issue in an assessment appeal. Deadlines run from the date the notice mails, and once the tax bill arrives it is generally too late to contest that year’s value.

1. Read the notice and calendar the deadline

Find three things: the tentative value, the change from last year, and the date and place of the review board. Michigan’s notice must carry all three by statute. Calendar the board date the day the envelope opens.

2. Pull your property record card

Check every factual field, square footage, lot dimensions, bedroom and bath count, garage stalls, basement finish, construction quality, condition. One wrong measurement can carry a value error for years, and fixing it requires no opinion, only a tape measure.

3. Talk to the assessor informally

Raising an erroneous assessment with the assessor early in the year can produce a correction without a formal proceeding, because the assessor can still amend the books. It’s free, and it’s skipped far too often.

4. Build your evidence file

Gather three to five comparable sales that closed near the assessment date, the record cards and photos of those comparables, photos of any condition problem at your own property, and your deed or purchase contract if you bought recently. A private appraisal is the strongest single document you can bring, why home appraisals matter explains what makes one persuasive.

5. File the written appeal on the local form

Every jurisdiction has its own petition form and filing window. Submit in writing, attach the evidence, keep proof of delivery. In most states a written protest to the local board is a prerequisite to any further appeal, skip it and you forfeit the higher forums.

6. Present, then escalate if needed

Hearings are short. Lead with the factual error if you have one, then comparables, then uniformity. If the board denies you, the next stop is a state tribunal or circuit court, each with its own deadline measured in days. Weigh escalation against the annual savings: a $300 reduction repeats every year the correction stands.²

What Michigan homeowners should know

Michigan runs a two-value system no other state copies exactly, and it changes both what you owe and how you appeal. Every figure below is set by statute or by the State Tax Commission.³

Assessed value is 50% of true cash value: The constitution caps the ratio at 50%, so your assessed value should be about half of what the home would sell for. Meaningfully more than that is itself an appeal.
Taxable value is capped at the lesser of 5% or inflation: Under Proposal A, taxable value is the prior year’s taxable value minus losses, times the lesser of 1.05 or the inflation rate, plus additions, or the current assessed value, whichever is lower. For 2026 the State Tax Commission set the multiplier at 1.027, a 2.7% increase, and local units may not use any other figure.
Taxable value uncaps the year after a sale: On a transfer of ownership, taxable value resets to the assessed value the following calendar year. A long-held home can carry a taxable value far below half its market price, and a buyer inherits the reset, not the seller’s number.
The Principal Residence Exemption removes up to 18 mills: Filing Form 2368 exempts your principal residence from the local school operating millage, up to 18 mills on $100,000 of taxable value, $1,800 a year. File by June 1 for the summer levy or November 1 for the winter levy. See Michigan’s Principal Residence Exemption rules.
Normal maintenance cannot raise your assessment: Michigan bars assessors from counting value added by normal repair, replacement, and maintenance on residential property until the home sells, and names 17 specific items, roof and siding, complete rewiring, plumbing and light fixtures, a same-type furnace, and a whole-home generator among them.
Appeal in March, escalate by July 31: Residential owners must protest to the March Board of Review before the Michigan Tax Tribunal has jurisdiction, then petition on or before July 31. Commercial and industrial owners may go direct, with a May 31 deadline.

One mechanism works quietly in your favor: the Headlee rollback. When growth in taxable value on existing property would push a district’s revenue up faster than inflation, the millage rate must be reduced, the levy-versus-value principle written into the constitution.

How Align handles Michigan property taxes

The year after a Michigan home sells, its taxable value resets to half of the assessor's market value, so the seller's tax bill is not your tax bill. Samantha quotes the number you will pay, and she quotes it on the high side on purpose.

Veterans may owe far less. Michigan's Disabled Veterans Exemption removes property taxes on the home a qualifying disabled veteran lives in, and Samantha points eligible buyers to it.

See the Michigan uncapping study

Sources: Michigan Treasury, transfer of ownership and uncapping; Michigan Treasury, Disabled Veterans Exemption (MCL 211.7b).

FAQ: Property tax assessments

Here are answers to common questions about property tax assessments.

What is the difference between assessed value and market value?

Market value is what a willing buyer would pay today. Assessed value is the figure the local assessor assigns for tax purposes, often a legally set fraction of market value, 50% in Michigan, and sometimes capped in how fast it can rise. The two can drift apart for years, which is exactly why comparing your assessment against recent sales is the core of any appeal. For how a lender’s valuation differs, see the home appraisal process.

How do I appeal my property tax assessment?

Read the valuation notice for the deadline, request your property record card and check it for factual errors, gather three to five comparable sales that closed near the assessment date, and file the appeal form with your evidence attached. Most jurisdictions start with an informal review or a local board of review, then allow escalation to a state tax tribunal or court. More background sits in our Taxes & Money library.

Does a home renovation raise my property taxes?

Permitted work that adds square footage or materially improves the property is typically picked up by the assessor and added the following year. Routine maintenance, a new roof, paint, a replacement furnace, usually does not, and in Michigan it is barred by statute until the home sells. The increase reflects added value, not what you spent, so a $60,000 addition rarely adds $60,000 to the assessment. Our guide to the impact of home improvements on property taxes goes project by project.

How often are properties reassessed?

It varies widely. Some jurisdictions reassess annually, others on a two-, three-, or five-year cycle, Cook County reassesses one-third of the county each year, with interim adjustments applied by ratio. Sales, permits, and new construction can trigger an off-cycle review. Check your assessor’s published cycle so you know when your next notice should arrive.

The bottom line on property tax assessments

A property tax assessment sets your share of a community’s levy, not the size of the levy itself. Your bill is value times rate, one mill raises $1 per $1,000 of taxable value, and the rate is the levy divided by the total assessed base. Which is why a district-wide 10% value increase against a flat budget leaves a $2,000 bill at roughly $2,000. Appeals are won on the property record card, on three to five comparable sales near the assessment date, and on uniformity. In Michigan, assessed value is half of true cash value, taxable value climbs no faster than 2.7% in 2026, and the residential Tax Tribunal deadline is July 31.

If you’re ready to buy or refinance and want the property tax line estimated correctly instead of optimistically, talk to Align Lending. We’ll shop your scenario across our lender network and show you the payment, escrow included, side by side. Call 248-506-5727 or start online.

Footnotes:

1. Example figures in this article are hypothetical and for educational purposes only; they do not constitute an advertisement of credit terms or a rate quote under federal or state lending laws. Millage rates, assessment ratios, and exemptions vary by state, county, and taxing district. Your actual property tax depends on your property’s assessed and taxable values and the combined rate levied where it sits. Return to text.

2. This is general information, not tax or legal advice. Property tax appeal grounds, evidence rules, filing forms, and deadlines are set by state and local law and change from time to time. Consult a qualified tax professional, attorney, or your local assessing officer about your specific situation before filing. Return to text.

3. Michigan’s inflation rate multiplier is recalculated every year by the State Tax Commission under MCL 211.34d; the 1.027 figure applies to the 2026 capped value formula only. Board of Review meeting dates are set locally within the statutory window, confirm yours with your city or township assessor. Return to text.

Sources: property tax cycle of nearly two years, the six steps of assessment, review, equalization, levy, extension, and collection, the nine-to-twelve-month assessment cycle, the discover-list-value-assess sequence, the three approaches to value, tax rate computed as levy divided by total equalized assessed value, and tax bill computed as value times aggregate rate, Illinois Department of Revenue, PTAX-1-A, Introduction to Residential Assessment Practices (R-05/26). Grounds for appeal, the steps in appealing an assessment, the evidence list, the rule that tax rates are not an issue in an assessment appeal, and that a written appeal to the local board is a prerequisite to further appeal, Illinois Department of Revenue, Assessment Appeals. Assessed value determines an owner’s share of local levies and an assessment increase does not necessarily increase the tax bill; residential assessed value of 10% of fair market value and triennial reassessment, Cook County Assessor’s Office. Acceptable appraisal level of 0.90 to 1.10 for any class of property, International Association of Assessing Officers, Standard on Ratio Studies (2013). A mill equals one-thousandth of a dollar and one mill raises $1 per $1,000 of taxable value; the Headlee rollback reducing millage when taxable value growth would outpace inflation, Michigan Senate Fiscal Agency, State Notes, Property Tax Millage Limitations in Michigan. Assessment at 50% of true cash value and the capped-value formula using the lesser of 1.05 or the inflation rate, MCL 211.27a(1) and (2); uncapping of taxable value in the calendar year following a transfer of ownership, MCL 211.27a(3). Inflation rate multiplier of 1.027 (2.7%) for the 2026 capped value formula, Michigan State Tax Commission Bulletin 14 of 2025. Assessment notice contents and mailing not less than 14 days before the board of review, MCL 211.24c. Tax day of December 31 of the immediately preceding year, MCL 211.2(2). Nonconsideration of normal repair, replacement, and maintenance on residential property and the enumerated items, MCL 211.27(2). Definition of additions and new construction, MCL 211.34d(1)(b). Principal Residence Exemption from local school operating millage up to 18 mills and filing deadlines of June 1 and November 1 on Form 2368, MCL 211.7cc and Michigan Department of Treasury, Principal Residence Exemption Guidelines. Requirement that residential assessments be protested before the board of review, MCL 205.735a(3); Michigan Tax Tribunal petition deadlines of July 31 for residential real property and May 31 for commercial, industrial, developmental, and utility personal property, MCL 205.735a(6); Michigan State Tax Commission Bulletin 10 of 2025, 2026 Property Tax Appeal Procedures. Escrow cushion limited to two months of estimated disbursements and annual escrow account statements, Consumer Financial Protection Bureau; 12 CFR § 1024.17. Repeat-sales methodology and metro, county, and ZIP-level coverage of the House Price Index, Federal Housing Finance Agency.

This article is for informational purposes only and is not intended to provide legal, financial, or tax advice. Assessment ratios, millage rates, exemptions, appeal grounds, and filing deadlines are set by state and local law and change over time; confirm current figures and dates with your local assessing officer and consult a qualified professional about your situation. Figures shown are illustrative, are not a rate quote or an offer of credit, and are subject to change. Align Lending is an independent Michigan mortgage broker, NMLS #2041154.